News

Ready for an end of year rally?

It is meant to be a good time to buy equities but prices are still sliding

Stock markets gave a muted reaction to Barack Obama's election win and a huge cut in British interest rates last week - but some experts say now is the time to buy.

Brokers had been expecting equity indexes on both sides of the Atlantic to rally sharply after the election, but in the event the S&P 500 soared 4.1% the day before only to fall 5.3% after the result was announced - a classic case of rising on the expectation and falling on the news.

The size of the Bank of England's rate cut surprised analysts - most had expected a half-point cut - but it failed to boost the stock market, with the FTSE 100 index falling 5.7% on Thursday. It closed the week down 12 points at 4,365.

The cut in Bank rate came after the release of figures showing that Britain's service sector, 55% of national income, was declining sharply. The